How a $7B Food Redistributor Meets Customers’ Evolving Data Demands
As food and beverage brands offer more niche products and expand their catalogs to meet evolving consumer tastes, the demand for efficient logistics and distribution to serve global customers in new ways has soared. Illinois-based Dot Foods plays a significant role in the process, developing innovative solutions for its food industry partners – manufacturers, distributors, operators – to increase sales opportunities and better serve the end customer.
In fact, the food industry redistributor plays such a role that it was recognized by Forbes as one of America’s largest private companies in 2017 (No. 63). But how did the family-owned and -operated Dot Foods, headquartered in a town with a population around 2,000 people and tucked into rural western Illinois – just a few stones’ throws away from the Mississippi River – grow into a $7 billion food redistribution business, the largest in the country?
Dot’s success might be traced to a couple of key factors:
- Identifying and effectively filling a gap in traditional food distribution models
- Providing a better service experience for its customers and trading partners
A critical component of that success stems from the fact that Dot can say yes to all the ways its customers want to electronically interact and communicate, making the company supremely easy to do business with.
What is Food Redistribution?
Food manufacturers are experts in product development, production, and marketing, but their transportation systems are not always set up to be the most efficient. In fact, most transport networks are only configured to efficiently sell full truckloads (FTLs) of product, which isn’t always ideal for smaller distribution organizations.
In the United States, there are more than 15,000 distributors, but many of them are not large enough to regularly order from manufacturers in full truckload quantities or cannot warehouse such large quantities for long periods. The solution to that problem is redistribution. Enter Dot Foods and its innovative business model, including its LTL (less-than-truckload) services.
As a food redistributor, Dot buys full truckloads from more than 900 manufacturers and consolidates their products in 11 distribution centers across the U.S. The company then resells these products in more manageable LTL quantities to distributors. This model helps:
- Manufacturers increase sales by giving them access to distributors they otherwise might not be able to serve
- Distributors operate more efficiently by providing access to tens of thousands of products without the added cost of inventory and warehouse space
While manufacturers compensate Dot to handle the distribution of their costly LTL orders, there is no extra cost to the distributor when buying from Dot. That means Dot offers its 127,000 products to distributors in all 50 states and more than 25 countries at no additional charge. And for you, the consumer, this means all your favorite products continuously stock the shelves inside your local retailer at the expected price.
The Data Demands of Logistics, Distribution
The process sounds simple: Dot Foods receives orders from thousands of distribution customers, requesting items from various manufacturers. Dot compiles the items, many of which are stocked in Dot’s own warehouses, and delivers them to the customer.
But Dot’s unique role in the food supply chain – where the company simultaneously acts as a buyer, seller, warehouse manager, redistributor, and shipper – means Dot must support a variety of data and electronic communication methods from its partners, suppliers, and customers. In addition to all the different protocols, applications, and data formats the company must support for its external B2B partners, Dot also uses a variety of internal applications that don’t natively communicate with one another.
Getting all these systems to work together requires significant amounts of custom code and manual data entry to keep business moving. However, to continue its growth and maintain its reputation as the premier food redistributor in the world, Dot Foods sought a better way to support its customers’ EDI and non-EDI – flat file, spreadsheet, XML, fax – orders from a single integration platform.
Dot Foods solves a distribution puzzle that’s plagued traditional food supply chain models. The Midwest-based organization buys full truckloads (FTLs) from nearly 1,000 manufacturers and consolidates their products in about a dozen distribution centers across the country. Dot then resells those products as more manageable LTL quantities to distributors, who often cannot accommodate FTL-type quantities.
It’s a valuable service that helps manufacturers and distributors access new markets and increase efficiency, and it’s a foundational offering that’s enabled Dot to grow into the $7 billion-dollar food logistics organization it is today. But one thing that enables Dot to provide 127,000 products and deliver them to distributors in all 50 states and more than 25 countries is its ability to handle all types of electronic data communications from its trading partners.
How Dot Foods Handles EDI, Non-EDI Communications
Dot Foods uses leading any-to-any data transformation technology to accommodate its customers’ growing data requests and accept non-EDI formats. The technology, part of the Cleo Integration Cloud platform, converts a document into a format (usually EDI) that can be accepted by its internal system, which means its partners and customers don’t have to use EDI to do business with Dot. And with the platform’s auto-mapping tools, the food redistribution giant can easily integrate that converted data into its existing applications and processes for a fully automated business workflow.
“The main scenario that Cleo has improved,” said Sean Ketcham, Dot Foods’ senior e-commerce analyst for customer integration, “is the phasing out of much of our manual order entry. … We realize the benefits of not wasting time doing busywork or keying (in data) when it doesn’t need to be done.”
Here are two examples of how Dot can take any document type and convert it to EDI for easy ingestion into Dot’s systems and workflows:
Spreadsheet to EDI
A Dot sale rep receives from a customer a purchase order as a spreadsheet. Dot sets up a hot folder for each customer map that’s built into the Cleo Integration Cloud’s data transformation engine, and the sales rep drops the spreadsheet into the respective customer’s hot folder. The file monitors running continuously grab anything that is moved into one of these folders. The Cleo solution then takes the spreadsheet, processes it through to Dot’s database, and pushes it into the sales rep’s EDI screen, where the sales rep can simply accept the file and process the order.
Fax to EDI
Dot paired Cleo’s data transformation solution, Cleo Clarify, with optical character recognition (OCR) software to automate orders via fax. Dot uses the OCR software to scan faxed orders, export them into a fixed-length flat file that has a map built for it in Cleo Clarify. Dot then uses tables in Cleo Clarify to process more than 700 customers using just one map. Now, instead of orders for these 700 customers having to be manually keyed in, they automatically show up for the sales department to process, just like an EDI file.
Ecosystem Integration for the Modern Business
It’s critical for high-volume organizations like Dot Foods to support an expanding number of systems, applications, and trading partners in its business ecosystem, and the ability to accept a variety of data formats opens new revenue streams and enables business growth.
With Cleo Integration Cloud, Dot gained not only robust data transformation capabilities and simplified integration of EDI and non-EDI formats but also a powerful platform that provides:
- application-to-application integration
- Web-to-application interfaces
- Business process automation
- Data mirroring
- Web communication portals
“The most amazing part of it all,” Ketcham adds, “is that we’ve taken the need for custom programming out of the process.”